TIM S.A. (NYSE:TIMB) Q2 2023 Earnings Conference Call August 1, 2023 9:00 AM ET

Company Participants

Alberto Griselli - Chief Executive Officer

Andrea Viegas - Chief Financial Officer

Conference Call Participants

Marcelo Santos - JPMorgan

Bernardo Guttmann - XP Inc.

Vitor Tomita - Goldman Sachs

Fred Mendes - Bank of America

Leonardo Olmos - UBS

Operator

Good morning, ladies and gentlemen, and welcome to TIM S.A. 2023 Second Quarter Results Conference Call. We would like to inform you that this event is being recorded, and all participants will be in a listen-only mode during the company's presentation. There will be a replay for this call on the company's website. After TIM S.A.'s remarks are completed, there will be a question-and-answer session for participants. At that time, further restrictions will be given.

We highlight that statements that may be made regarding the prospects, projections and goals of TIM S.A. constitutes the beliefs and assumptions of the company's Board of executive officers. Future considerations are not performance guarantees. They involve risks, uncertainties and assumptions as they refer to events that may or may not occur. Investors should understand that internal and external factors to TIM S.A. may affect their performance and lead to different results than those planned. [Operator Instructions]

Now I'll turn the conference over to the CEO, Mr. Alberto Griselli, CEO of TIM S.A., and to Ms. Andrea Viegas Chief Financial Officer, to present the main masters for the second quarter of 2023. Please, Mr. Alberto, you may proceed.

Alberto Griselli

Good morning, everyone, and thanks for attending our conference call. Outstanding achievements and rock solid results marked the second quarter, driven by the sharp execution of our plan. Our top line rose more than 9% year-over-year with EBITDA growing above 17%. This combination led to a margin expansion of more than 300 basis points. Our operating free cash flow grew more than 65% versus the second quarter of 2022 and the net income more than doubled. Strong operational trends were achieved jointly with the aforementioned financial highlights. ARPU, churn and network quality presented their best performances in years.

On the ESG front, it is worth highlighting that TIM was certified once again, as a great place to work, achieving a favorability of more than 90% with solid improvements versus last year. In this context, we were also recognized as one of the best companies for inclusive work experience. Under the scope of the environmental pillar, we are executing two initiatives that impact energy consumption. The first is related to transforming our sources to renewable energy proprietary plans. Under this project, we closed the quarter with 87 plants. The second initiative addresses energy consumption by developing smart public lighting solutions that drastically reduce the usage of electricity by municipalities. The integration of ESG aspects into our business dynamics and how we can promote social impact while developing and selling solutions for our client is a relevant part of our strategy.